In Shanghai, social media is everywhere: Facebook, Twitter, QQ, Ren Ren, Kaixin, everyone is talking about them. Websites like Dianping are huge with more than 300,000 users checking in daily to review, read and rant, pick up the latest special deals and discover new openings. As a restaurant, social media can be your best friend or it can turn around and stab you in the back.

Properly managed, it's a godsend of cheap, direct and measurable communication with your customers, especially those who have come of age in this new and more virtual world. A source of valuable feedback, the internet is used by managers to reward or chastise staff and of course, good reviews bring good business. But woe betide those who misuse it – a bad or even a fake review can be a blow to reputation and credibility and websites like SmartShanghai have done well to oust review-rigging restaurateurs from their forums.

Shanghai restaurants are in a frenzy of blogging, “friending” and dispatching e-newsletters plastered with special deals. A desperate scramble to get bums on seats, this is what it all boils down to. Deals. Everybody loves a bargain, and in a market where competition is rife, with no credible ratings systems to maintain quality and inconsistent standards weakening customer loyalty, too many restaurants rely on special offers to bring in the crowds.

One positive online innovation of late is “group-buying”. A worldwide trend that originated in Chicago, it’s an all-round win for customer, restaurant and media alike with the offers only honoured when a minimum number are sold. Shanghai versions have sprung up, with some like Wufantuan focusing on dining deals alone (one recent offer for a surf and turf BBQ at Japanese spot joint Taishao brought savings of RMB 417). Others such as Enjoy Meitian and FlashBuy mix up food and drink with various other lifestyle offerings but still cook up some amazing bargains like a recent FlashBuy deal for three-courses at Des Lys priced at RMB 138 (original price RMB 268) or an RMB 500 value Naam Thai voucher sold for just RMB 20 on Enjoy Meitian. Even at DiningCity, we’re working on our own version of this and will soon be bringing you deals on a regular basis – and this is all just the beginning.

The Expo will be leaving behind a very big hole in the hospitality industry, and occupancy rates are expected to slip to all time lows. The knock on effect will be deals, deals and more deals on rooms and restaurants. It’s good for the consumer but for the business itself it’s a double-edged sword; revenue is not the same as profit and not everyone is a valuable customer. A recent brunch promotion at one newly opened five-star hotel restaurant in Pudong sold a staggering 6,000 vouchers on Dianping in just a few days! It sounds incredible but this kind of success can be a false friend. The real winners in this case are the customers, the suppliers and Dianping. As a restaurant you get the numbers but they may not be your target market and they’re unlikely to ever return for full price. All you’ve really done is put some short-term padding round your bottom line and some cracks in your brand for the future.

Many high-end restaurants avoid this route in a bid to maintain their brand and status – you don't see places like Mr & Mrs Bund, 100 Century Avenue or El Willy throwing all-you-can-eat buffets or 50 per cent discounts. A set menu here and there is their only concession. Many Hong Kong and international groups are now making their way to Shanghai with Gaia’s Isola and US group Morton’s arriving last month (opening on the 22nd and 23rd respectively). Exclusive nightspots M1NT, Privé and The Drop have also arrived. Others like Dragon Eye and IFC are still to come, and we won’t be expecting any price slashing from them either, at least not to start with. Big names like Nobu and Zuma that are already well-established in Hong Kong are holding off, not yet prepared to risk their brand with the pressures of an empty restaurant.

Word of mouth is a powerful weapon and social media gives a megaphone to anyone with something to say. It can quickly take on a life of its own with website promotions adding pressure to an already competitive pool, dictating what the restaurants should do. To survive, restaurants need to get involved and get savvy – making sure their product is solid and investing time, money and manpower to stay on top. With new restaurants opening on a daily basis, it’s a battleground out there and social media managers are the new generals, leading their troops in the fight for success.

Web: www.diningcity.com